Is Phil Ivey Guilty of Cheating Under New Jersey Law?

Phil Ivey has found himself in the center of yet another casino controversy, this time on the wrong end of a lawsuit claiming the poker superstar “cheated” the Borgata Casino while playing Baccarat through an advantage gambling method known as edge sorting.

In 2012 Ivey had $12 million in winnings withheld by Crockfords Casino in London after the casino alleged he used edge sorting to gain an unfair advantage over the casino –Ivey admits to using the tactic but denies that it’s cheating. Ivey filed a lawsuit against Crockfords in July of 2013.

So who is right and who is wrong in these two situations? It’s actually a far more complicated matter than most people realize.

Personally I have little opinion on this matter as I feel both sides have strong cases.

The incident at the Borgata

Without rehashing the entire incident, the basics are as follows.

According to a report on NJLawJournal.com, the Borgata is suing Phil Ivey for $9.6 million stemming from four sessions of Baccarat in 2012 where the casino alleges Ivey edge sorted. The suit also names card manufacturer Gemaco and Ivey’s companion during the games, Cheng Yin Sung.

John Brennan does an excellent job of detailing precisely what took place at NorthJersey.com, as well as an in-depth look at Baccarat and edge sorting.

The incident at Crockfords

Again, I won’t rehash the entire story —you can read that here— but there are a few important details I’ll relay.

The incident at Crockfords occurred in August of 2012 but only came to light in May of 2013; two months later Ivey filed his lawsuit. The two incidents (Crockfords and Borgata) were somewhat concurrent and strikingly similar to one another.

Interestingly, in September of 2013 Ivey admitted to edge sorting, choosing to fight the case using the defense that edge sorting is not cheating.

Why Ivey’s actions can be seen as cheating

Looking at the specifics of the two incidents it’s hard to call Ivey’s actions anything but premeditated.

He would arrive with an expert in edge sorting, who would then instruct the dealer to rotate certain cards in certain ways because “Mr. Ivey is superstitious.” Ivey also asked the casino for several other concessions, which the casino agreed on the premise they were for superstitious reasons and not to gain an unfair advantage.

This wasn’t merely a case of Ivey noticing a flaw in the cards’ design and not saying anything about it while happily pocketing the casino’s money, he purposefully went in search of the flaw and manipulated the casino staff in order to gain an advantage in the game.

The charges filed against Ivey by the Borgata are pretty telling as to what the casino is accusing him of: breach of contract, fraud, conversion, unjust enrichment, civil conspiracy and racketeering.

According to the NJLawReview.com article, Ivey used the pretext of being superstitious in order to hide what his “true motive, intention and purpose in negotiating these playing arrangements was to create a situation in which he could surreptitiously manipulate what he knew to be a defect in the playing cards in order to gain an unfair advantage.”

The Borgata is also taking the line that edge sorting is no different than marking cards. Under New Jersey law [bold mine]:

“Knowingly to deal, conduct, carry on, operate or expose for play any game or games played with cards, dice or any mechanical device, or any combination of games or devices, which have in any manner been marked or tampered with, or placed in a condition, or operated in a manner, the result of which tends to deceive the public or tends to alter the normal random selection of characteristics or the normal chance of the game which could determine or alter the result of the game.”

Additionally, by insisting on the use of a card shuffler Ivey may have violated a New Jersey statute “making it a crime to use any cheating device in a casino.” Under New Jersey law [bold mine]:

“use or assist another in the use of, a computerized, electronic, electrical or mechanical device which is designed, constructed, or programmed specifically for use in obtaining an advantage at playing any game in a licensed casino or simulcasting facility.”

Ivey’s and Sung’s actions could also be construed as swindling or cheating based on New Jersey law [bold mine]:

“A person is guilty of swindling and cheating if the person purposely or knowingly by any trick or sleight of hand performance or by a fraud or fraudulent scheme, cards, dice or device, for himself or herself or for another, wins or attempts to win money or property or a representative of either or reduces a losing wager or attempts to reduce a losing wager in connection to casino gaming.“

Reversing the roles

A lot of the commentary on edge sorting feel it is up to the casino to protect themselves, and the games are already rigged in their favor so the casinos are simply mad someone got one over on them. Unfortunately, this is a purely emotional response, a form of justification bias.

When players go into a casino they do so with the understanding that they will get a fair game –that the dice will not be loaded and the dealers and staff are on the level.

Imagine if Phil Ivey discovered that after losing $10 million playing blackjack the decks being used were compromised (unbeknownst to the casino) and were missing certain cards that put Ivey at a significant disadvantage.

I’d be curious to know how people would feel about a casino making the same claims as Ivey?